Why the Gold Standard Can Return the World to Global Economic Prosperity

With youth unemployment at 56.4% in Greece and 55.9% in Spain, with nearly 1/3 of 25-34 year olds in America living with their parents, with more than 100,000,000 in China still earning $1 or less a day, and with food prices rising by more than 32% since 2007 in the UK, all due to immoral Central Bank monetary policies that deliberately devalue global fiat currencies in a race to the bottom, a gold standard is quite capable of returning the world to global economic prosperity and ushering in one of the most stable economic growth periods in the history of the world.

For example, the Central Banks’ propensity to deliberately destroy wealth is easily illustrated by the current conditions that they have created in global bond markets, where despite the high risk of owning sovereign bonds, Central Banks refuse to offer higher yields for the public assumption of this enormous risk, and in fact, in some countries, have even goaded the public into paying them interest (negative yields) on government bonds issued in Germany, Finland, Denmark, Switzerland, Netherlands, and Austria (with France among other countries likely next in line). Central Banks have successfully sold their propaganda that government bonds are “safe havens” for decades to the public, and the public has gobbled up this heaping mound of rubbish hook, line, and sinker.

For this reason, governments and bankers (because they are two heads of the same monster) can offer public negative yielding bonds and still trick the public into buying them. Furthermore, in the US, the Central Bankers have pledged to buy 90% of all new government bond issues in 2013, the only scenario that will present (and perhaps only delay) a total collapse of the US Treasury bond market. Thus only trickery, deceit and chicanery are necessary tools on behalf of Central Bankers to prop up the illusion that Treasury bonds are “risk-free”. Nothing on the surface is ever what it seems to be. Because we have always dug below the surface and have never accepted the garbage that governments and bankers attempt to repackage as great value and sell to the public, we put everyone on notice in January, 2007 to get rid of USD denominated bonds and reiterated "10 Reasons Why No One Should Own Any Dollar Denominated Bonds, v 2.0", in February of 2008, when we also stated that physical gold and physical silver were much better places to park your money back then. Since then, both gold and silver have already both nearly doubled in price against the USD. Not bad for what bankers were trying to portray as “crazy talk” back then, right?

In any event, those that wish to keep the people hopelessly enslaved in our current, debt-based, Ponzi-ridden, fiat currency system always attack the idea of a gold standard because they say that the use of a gold standard today is impossible because:

(1) The price of gold would have to be “too high” to reimplement a gold standard,

(2) A gold standard would not prevent runaway inflation because there are historical periods of runaway inflation under previous gold standards; and

(3) If the same private interests that run our current global monetary system run a gold-based monetary system, then there is no sense in having a gold-based monetary system.

As I’ve illustrated in the brief excerpt from my book “The Golden Gift” below, all of these above points are fabricated lies that can easily be disproven and thoroughly debunked with a small dose of history and another dose of logic. The only arguments against the implementation of a gold standard come from the banking cartels controlled by the likes of the Rothschilds, the Rockefellers, and their minions and puppets, because the implementation of a true 100% backed gold standard would mean an end to the reign of the private banking families that control today’s money creation and supply over all of humanity. Sound money, versus our current immoral monetary system, would bring about an end to endless wars and perpetually and massively artificially-distorted stock market, commodities, and real estate prices, and currency valuations for the Machiavellian benefit of the private banking families that own the world's Central Banks and no one else.

Lastly, for the sake of an intelligent and valuable discussion, please do ensure that you read the below excerpt in its entirety before posting comments! I believe that following this singular rule will allow for the best debate. Thank you.

About the author: JS Kim is the founder and Managing Director of SmartKnowledgeU, a fiercely independent research & consulting investment firm with a focus on gold and silver. One of the primary missions of SmartKnowledgeU is to usher in a new age of global economic prosperity with the return to sound money principles. Follow us on twitter @smartknowledgeu, on Facebook here and on YouTube here.

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A classical dollar backed gold standard will not work unless it is matched with a central banking system that involves itself only with regulating the solvency of all banking and lending organizations (i.e. banks, shadow banks, insurance companies, et al), much like the old Suffolk Bank. However, since this is a power of Congress, it must be public, at least 2/5ths owned by the Congress, and staffed not by economists, but accountants. I cover this in depth in "New American Revolution", and in the "On Liberty" series at www.electanewcongress.com, under "The Orderly Removal and Replacement of the Federal Reserve Bank". In it, I also explain the need to view gold not as a value, but strictly as a standard of measurement. It is a bit abstract, but critical to understanding how a classical gold standard performs the regulation of credit, leaving the central bank to strictly and solely regulate solvency. Tyler won't print it but I still send it to him, still, you can side step him and read it for yourself at www.electanewcongress.com.

BUT, clearly the problem, New American Revolution, is the double-bind paradox, Catch 22, that the best organized criminals ALREADY overwhelmingly dominate the established systems. There are a handful of enormous conglomerate media corportions, worth over a trillion dollars, providing people with most of their "news," and only those who can raise billions of dollars can afford to use those means to communicate to a large enough number of people to perhaps make a slight difference?

We ALREADY have a system where less than 25% of the people deliver 100% of the political power to the best professional liars and immaculate hypocrites. The established systems are ALREADY almost inconceivably crazy and corrupt, and automatically getting worse, faster. In that context, every possible good idea is a non-starter. The only realistic future is for that system of collectively craziness to go through psychotic breakdowns. America was ALREADY taken over by the best organized gang of criminals. That is now a runaway. Anyone's good ideas, in that context, appears to be like those of ants in front of a steamroller!

We don't need a gold "standard", which is implicitly defined by, and managed by, government and a centralized financial elite --- we merely need FREEDOM in the monetary sphere, to be able to use as money whatever is mutually agreed upon, with gold undoubtedly playing a large role, but with the exact determination left to the parties involved in any particular exchange.

The last gold standard was 'Rape by the private bankers version 1` so returning to a gold standard as the author explains it leaves the banksters in control. This means it does not address the basic problem which is that the private bankers have used their control of the right to issue money to accumulate (according to recent Swiss research) 80% of the world's wealth at the expense of general public. Furthermore a gold standard causes deflation and recessions in response to increases in productivity and this is the opposite of what should occur. The answer that has stood the test of time (operating successfully for 500 years at one stage) and repeatedly proven itself is public banking, where governments reclaim the right to issue national currencies, do so linked to productivity and the parasitic private banking industry that is slowly stranging the economies of the west is disbanded.

I WISH I could still believe in ideal solutions as superficial as those presented in this article! It presents what I almost always find being presented, namely good analysis of the problems, followed by bullshit solutions, that ignore what was just demonstrated as the basic facts during that analysis!

To quote from Chapter Three of the The Golden Gift, linked to this article:

"... our current banking system is not only immoral but that it is downright criminal."

Of course that is correct, and that book is also obviously correct that the fractional reserve banking system, which is now a globalized, privatized, fiat money made out of nothing, as debt, system, screws 99.9% of the people, while fantastically benefiting the 0.1% who have been able to corrupt governments to the degree that the privilege of legalized counterfeiting, as a runaway triumphant fraud, is enjoyed by a tiny minority, while the vast majority of the other people are forced to accept and adapt their lives around that fraud, by their own governments!

However, the idea that a "gold standard" would fix those problems is a totally goofball notion, which is based on a silly and shallow idea about what those problems actually ARE. What we "need" is a "truth standard" in our money system. However, that ideal immediately runs into a head-on collision with the truth about militarism.

Money that is based on the conservation of matter is a first approximation towards an old-fashioned kind of "truth standard" in the monetary system. Since commodities cannot be made out of nothing, nor sent to nothing, there is an inherent degree of "truth" in some money that is based on the reality of the existence of some commodities. However, there are level after level after level of bogus presumptions that surround that kind of superficial view regarding what is an adequate "truth standard" with respect to a monetary system! What is immediately relevant is the sequence of the advancements in postmodernizing sciences, from the conservation of matter, to the conservation of energy, to then enable atomic bombs to be made, and go BOOM!

Of course, a global electronic fiat money system, backed by atomic bombs, is the runaway fraud that dominates the whole world at the present time. The old-fashioned systems of debt slavery, backed by wars based on deceits, have rapidly devolved to become debt insanity, backed by the threat of genocidal wars, along with democidal martial law. However, the notions that we can resolve those problems by going BACKWARDS to any old-fashioned commodity based money, because that is going to be "sound money" or "honest money" are RIDICULOUS!!!

If one consistently applies our current best understanding of energy laws and systems theory to monetary policy, one discovers that money is backed by murder. Furthermore, there is no other ultimate standard that "money" can be based upon than a murder standard. That is the only "truth standard" in money which is sufficient to embrace the real social facts.

The basics are as follows:

The fundamental concept is SUBTRACTION. That is the most important concept, and it is the one which is the most taken for granted to be understood in the most backwards ways, by the most people. Indeed, the basic equations regarding entropy, in thermodynamics and information theory, had an arbitrary minus sign inserted in them, in order that power and information would appear to have positive values, rather than have the negative values that the mathematics actually says is the case.

That is relevant to the entire process of measuring, which is one of the aspects of any monetary system. The point is that there is an unknowable WHOLE, from which everything we "know" is relatively subtracted. There are profound paradoxes built into the limits of measurement, due to the ways that the everything we "know" is relatively subtracted from a WHOLE than we can never know, although we ARE IT.

As soon as we define and talk about anything, we have done subtractions, separating something from the WHOLE, which things we then can discuss as relatively finite. Clearly, that applies both to chunks of gold, as well as to individual human beings, and everything else! As soon as we define a living thing as somehow separated from its environment, then it must engage in relative robberies across its defined boundaries, in order to maintain itself as a living entropic pump. It is a living fire, which must have more fuel to keep burning! Furthermore, to compound that basic problem, living things are able to reproduce, and thus to start more fires, which then also need more fuel to keep burning.

"Gold" is just one particular element, of a relatively stable dance of concentrated energy, put together in the intense fires of exploding suns, long ago, and later condensed into planet Earth. Meanwhile, almost everything else we human beings are doing is powered by the flow of energy from our Sun, being absorbed into the surface of the Earth, where it recycles around a few times, until bouncing back out into space. Those are the basic parameters of what we are all doing ... The more times that the energy goes around and around, the more life and consciousness there is.

Human societies are necessarily organized systems of lies, operating organized robberies, within that context. MONEY IS BACKED BY MURDER. Gold, or other commodity based forms of money, are merely symbolic expressions off the history of murder, backing up robbery, which has the fancy name of militarism. Militarism is the most sublimely and perpetually paradoxical of all human activities. The oldest book on the Art of War starts by saying that success in war is based on deceits, and ends by saying that spies are the most important soldiers. Thousands of years of the history of civilization have amplified that with more and more science and technology, to become the global system that exists today!

What made War King then developed to make Fraud King. The Fraud Kings are those who can make money out of nothing, as debts, which everyone else are forced to accept and adapt their lives around! Of course, those Fraud Kings are the symbolic manifestation of the top carnivores, or the supreme predators in the current human ecology. However, it is always a goofy mistake to blame them for the existence of the problems, which they have simply resolved in the most expedient ways that benefit themselves.

The idea that going back to gold, or whatever, as a better money system, has zero merit. The truth in a better truth based money has to accept that money is backed by murder. The debt controls depend on the death controls. The only ways forwards are to go through sufficient paradigm shifts in militarism, so that the monetary system can catch up to the degree of understanding that made things like atomic bombs go BOOM!

It is because atomic bombs go BOOM that old-fashioned ideas like going back a gold standard based money are ridiculous! The idea that we will be able to get "sound money" or "honest money" on the basis of conservation of matter is a hopeless old-fashioned idea when the conservation of matter is now but another special case of the conservation of energy. A better "truth standard" in money should be based on the conservation of energy. However, that immediately addresses the history of militarism, or the history of murder.

There are NO other solutions to our fundamentally fraudulent financial accounting system than to understand how and why the Fraud Kings were able to take control over that. However, fully understanding that means that the 99.9%+ of the people who are getting systematically defrauded by the tiny fraction of the population of Fraud Kings have to take more responsibility for operating the social murder systems. The breakdown of the debt controls, as debt slavery devolves into debt insanity, is driving the rest of that system towards collapsing into chaos, with the result of genocidal wars, and matching democidal martial law. However, the only genuine alternative long-term solutions would have to be better death controls, operating a better murder system, so that the debt controls, and the money system, that those are based upon, would become saner, and more sustainable..

... Of course, I understand that pointing out basic science concepts, which "should" be relevant to political economy, are practically non-starters! The majority of human beings do NOT understand basic science, and do not want to understand. The real world is based on runaway financial frauds, which work because there was a long history of lies, backed by violence, which ACTUALLY controls the world! Meanwhile, almost everyone who talks about those problems tends to do good analysis, which they then follow with bullshit solutions, based on going back to impossible ideals, which ignore their basic factual conclusions.

This article, and the book it links to, illustrated that general phenomenon. It correctly says: "... our current banking system is not only immoral but that it is downright criminal." However, it then advances totally bogus "solutions."

In fact, money is backed by murder, and there are NO real solutions which can fix the problems with the monetary systems that are not better murder systems. However, better murder systems raise the ever deeper issues of the the paradoxical ways that success in militarism depends on deceits. Thus, a "truth standard" in money, which is generally a good idea, would require a better "truth standard" in the death controls. That is also a generally good idea, but one which is practically impossible, especially since the established systems are based on the maximum possible social deceits, triumphantly operated by a tiny minority of the best organized gangs of criminals, which effectively control the puppet politicians and the muppet masses.

In theory, give the progress in all other sciences, we should have paradigm shifting progress in political science. However, instead, we have privatized global electronic frauds, backed by weapons of mass destruction, which are all effectively controlled by the people who were the best at lying about that, and promoting impossible ideals to rationalize and justify their runaway robberies and murderous systems. In that context, this kind of article was merely another classic work promoting reactionary revolutions, advocating going backwards, to impossible ideals out of the past, as being somehow sensible.

Hah! In fact, we are inside a runaway fascist plutocracy juggernaut, that is going to turn most of us into road kill, when that system finishes driving itself MAD. I already know that almost everything I have written above will simply bounce off the thick skulls of the vast majority of people. There deeper REAL problem is that money is backed by murder, and murder is backed by the maximum deceits. That is how and why we now live inside of a system controlled by the Fraud Kings, who developed their powers through the history of War Kings, creating sovereign states, that the best organized and biggest gangsters, the banksters, could covertly take control over, and thereby, force everyone else to live within a system based on triumphant fraudulence, driving itself MAD, and thus, towards SELF-DESTRUCTION.

Of course, I WISH that things were otherwise, however, over and over again, there has been a pattern of goofball articles published on Zero Hedge, recommending some kind of a return to a gold standard, and those articles, like this one, over and over again do good analysis of the criminals who control the financial system, without ever facing WHY that was the case, and WHY any genuine solutions have to face the fundamental fact that money is backed by murder, and therefore, any better money system MUST be backed by a better murder system, and that, in turn, has to face the facts regarding WHY the actual murder system was based on the maximum deceits, which was WHY the real world today is almost totally controlled by the Fraud Kings!

Well, the law is ceremonialized combat. Lawyers are mostly hired guns, that use their language to beat others up, and rob them, unless they, or their clients, get beaten up and robbed instead. The law is relatively civilized, considering the possible alternatives, which are a bunch of smaller bullies, beating each other up, in even crazier ways. The old saying, "some rob you with a gun, others rob you with a fountain pen" is clearly true. However, which is worse depends on one's point of view, or frame of reference. Abstractly, the system of organized robbery, through the laws, such as the monetary system itself, robs other people, through frauds, of ASTRONOMICALLY SIZED AMOUNTS. However, subjectively, being immediately faced with the barrel of a gun, and then and there "choosing" whether to hand over one's wallet, or be shot, seems to me to subjectively be a more intense situation ...

The monetary system is organized lies and robbery done abstractly, on a scale almost beyond imagination ... derivatives that are into the quadrillions of units, using money made out of nothing to gamble with, which collectively results in a kind of legal taxation of everything upon everyone, mediated through the lawyers, who rationalize and justify doing that, and take their slices of that pie for doing so ... VERSUS ... derranged gangs of bullies, beating you up, and taking your stuff, or destroying your things, or somebody you love, right in front on your eyes ??? Abstractly, the lawyers are worse criminals, because the law itself is the biggest organized criminal system. However, personal particular experience usually makes lesser levels of criminals more intense encounters! I have no way to resolve that contradiction. The intellectual view is that the big system is worse, however, the actual experience is that the smaller systems are worse.

As far as I can tell, there are NO "solid foundations," and "one does not get back what one gives," because the world seems to be mostly noisy chaos to me, in which what one gets appears to be more like the result of a pin ball game, rather than any sublime Karma. The abstract science usually looks nice enough, indeed beautiful ... However, the reality appears more and more to be random walks into absurdities.

As in this video that you linked, urwright, one of the real results of American style wars was to end up with people from the countries America went to war with becoming Americans. How crazy a result was that? Perhaps only time will tell? ... However, my view is that the "melting pot" has stopped melting, and so, hell appears to be freezing over?

The monetary system appears to have become basically frozen in history, as robbery was legalized, and done through lawyers being professional liars. Thereby, layer after layer, after layer, of organized lies, doing organized robberies, were applied over each other ... building up a social system that is looking lumpier and lumpier to me ... I am so used to taking my lumps, that I only expect more so ...

I have thought through the consequences of returning to the gold standard in my blog and came to then conclusion that the arguments against it probably outweigh the arguments in favour of it. Returning to the gold standard would force us to put gold worth billions of dollars into a vault just to serve as a monetary base. The monetary base would not be worth any more because we put the gold into vaults and allow money to be converted on demand, it would be worth more only because the future growth of money supply would be lower and thus holding money to preserve value would be more attractive. The same could be achieved by tieing down the money supply with aimple rule withouit having to dig up gold wasting considerable amounts of capital and labor. The impossibilty to react quickly to changes in the amount of money demanded by the public would require wage and price flexibility to ensure the economy does not plunge in to a recession in that case as history has shown that periods of enforced extraordinary deflation are associated with economic contractions. As the money stock rises in value people would have less incentives to invest in alternatives, government seignorage would plunge and with it public debt sustainability (ths particular point does not have to be bad). Full analysis here: http://makrointelligenzint.blogspot.de/2012/11/the-implications-of-going...

(3) If the same private interests that run our current global monetary system run a gold-based monetary system, then there is no sense in having a gold-based monetary system.

It doesn't matter which banker or politician you put in charge of counting the gold bars, the very act of counting them proves that we have not moved to a new "system". The way to go would be for the Pope and Ron Paul to personally do the inventory for each country. I think they're too old to do this every week. The Pope wouldn't lie and Ron Paul would saw all the bars in half to make sure they're not fake. We'd have to have a new ammendment to the constitution stating the gold will be stored in bins with the name of the owner (U.S. Treasury) hung above the bin and nobody can lease, borrow or own that gold without the sign being changed without massive penalties. (M.F. Global)

If they can put 1/100 th of an ounce into the new $100 coin(just about everything will cost $100, gas, bread etc after the reserve currency is gone) then the government can have a gold backed currency. Gold is for the little guy like China and a rural Chinese farmer, not the U.S. Treasury or M.F. Global or ETFs.

As long as people build world empires who cares about the golden trappings of extended budgets, all paid on credit thru borrowed money. They only become ominously important when battle lost and empire in peril.

How much longer can the US Dollar remain as the reserve currency? The US debt picture is pretty bleak.

If you were China or India how long would you tolerate doing business with a company that continues to lose money? China and others have be concerned that they will not see the return of their principal. They've invested in the USA because of the quantity of exports purchased by the USA. My guess is they will not tolerate the USA financial mess much longer. Ask yourself this....Why has China become a massive buyer of gold? Why does China prohibit the export of gold? The US can not keep prinintg indefinitely. Most Americans wonder when it will stop. Eventually the massive increase in debt will cause inflation (i.e. Germany after WWI). Frankly, I thought we would have reached that peak by now. Again, it's just a matter of time before GOLD increases in value and replace fiats worldwide.

Establishing a gold standard or its' use as money will not return the world to prosperity.

While it would affect the use of financial instruments, leverage, debt and state spending- all for the good. This is not the same as prosperity. Prosperity has always been a state of financial benefit for a select part of the population. While the size of people that share in some degree of prosperity has grown since the introduction of capitalism and industrialization, it has never grown to include the global community.

Defining your terms and their limitations is important, if you are to have a credible argument. Further, it is hard to make this point without considering resources, commodities, state policies regarding war and liberty as well as other milestones of prosperity.The next frontiers have yet to be opened for new exploration nor are they ripe for production. Trying to create prosperity from the leftovers of our industrial orgasm is impossible- that is why we are stuck in a financial nightmare of wealth transfer- the easy money has been made.

Returning to the gold standard will not return the world to prosperity because the last 200 years of prosperity (the benchmark by which we measure the thing itself) was fueled entirely by fossil energy, which is now going away no matter what you think.

That game is over. Better find a new game or your gaming gold isn't going to matter one iota. Except in how many slaves you can purchase to work your land. So in that regard, have at it.

Going to a gold standard will not create prosperity, but it will create a firm foundation, a base, upon which prosperity can be built.

In a world where saving is costly (via inflation and monetary manipulation) there exists no sure way to save the fruits of labor to generate the required capital to create new job and wealth creating businesses. A gold standard or a system that permits the use of gold and PMs as mediums of exchange allows the laborer to retain that portion of the wages he earns and does not spend as savings without loss by erosion of value.

Suggestion: We need to communicate more in terms of gold as money, instead of a "gold standard." We all know that any gold "standard" will be a rigged standard. We want the freedom to use gold as money, without the government determining the price of gold or any other intervention.

Bingo. I don't remember who the politician was (candidate, she lost, somewhere out west, I believe) but she said something about buying things with 2 chickens. My first thought, as the press began to mock her, was that she had spent some time with someone who is smart. She was trying to repeat a conversation that had made sense to her, but couldn't quite capture it intelligently. We don't need a govt monopoly on "money". In fact, as free people, we should absolute freedom over what we use and what we accept as "money". And never in history has this idea been more plausible than today. With instant access to information, our ability to move freely between forms of money would be quite simple.

That sounds right, and fits her, I think. She and Palin are similar animals, I believe. Somewhere along the way they have been exposed to some rational ideas, but they can't quite articulate them and very likely don't really understand them. The conspiracy theorist in me believes they are both unknowing plants meant to discredit certain points of view. If the first time you hear an idea it is delivered by some batshit crazy woman it is easy to ignore it the next time, no?

The wealth of our entire global economy currently gets transfered directly to the Bankers daily in exchange for absolutely worthless little tiny pieces of green paper. The more paper they print, the more real wealth they steal in exchange for the worthless ink and cellulose. They are currently stealing by volume and velocity more wealth than any other period in history. The metals are the best way to stop them.

Sad that in the next few years most people will lose everything they own because they can not comprehend what I just wrote in the lines above.

The wealth transfer trail branches out from the printing press to the farthest reaches of the globe. All wealth flows back to the printing press. The countryside is littered with maggot infested devalued paper that has been used to wipe their...

As in Zimbabwe, the people will be left holding truckloads of green poultry bedding and the Bankers will own all assets of real value.